At the core, everyone needs to be at the table.
USD
EUR/USD
The single currency shot to $1.1625 on improved risk appetite after the number of Americans filing new claims for jobless benefits dropped below 300,000 last week for the first time in 19 months.
GBP/USD
The British pound bolstered to $1.3736, eclipsing dovish comments from the Monetary Policy Committee member Tenreyo casting the current rout in the UK inflation levels as temporary and urging not to hike interest rates.
USD/JPY
The Japanese yen slammed to an almost 3-year low at 114 per dollar as the bullish divergence between Fed's tapering plans, and BOJ pro-stimulus policy paths reached an even higher level of contrast.
USD/CAD
The loonie spiked to a fresh high at 1.2354 per dollar, in tandem with multi-year tops crude oil price supported by increasing signs of tight supply over the next few months.
AUD/USD
The risk-friendly Aussie darted higher to $0.7425 following China's September factory-gate inflation rising to a record on soaring commodity prices.
USD/ZAR
The South African rand bolstered to 14.75 per greenback, boosted by market bets that the South African central bank would raise its main lending rate at its next monetary policy meeting in November.
USD/MUR
The dollar-rupee stayed put at 43.05(selling) on the local market.
16:30 - USD - Core Retail Sales(MoM)(Sep)
16:30 - USD - Retail Sales(MoM)(Sep)
The dollar Index extends its intense rebound near the 94.00 threshold, clinching a new high for this year 2021 amid an earlier rate hike expectation and announcement of a nearing tapering asset purchase which clearly impacted the yield curves.
A tightening of monetary policy by the European Central Bank remains far in the future but ECB remains vigilant on its inflation figures yet to be released this Friday. This could give additional upward momentum on the USD in the near term and exerts additional selling pressure on the euro and the pound.
On the technical side, after a breach and close above the 100% retracement A-B-C (93.72 level) ,the greenback could easily approach the 113% level at 94.38 followed by 127% level – 94.98 level in the near term. Resistance at 96.47 (161.8%) remains key level to watch
1.3750 marked the completion of ‘wave e’ of the triangular retracement (wave B) of corrective move A-B-C for GBPUSD and abruptly, we saw fresh sellers entering the market below the 1.3600 levels yesterday.
As per Elliott wave principle, GBPUSD is battling around 1.3515 levels and higher inflation, Brexit and Petroleum concerns could exert further pressure on the pound towards 1.32 levels towards completion of wave C.
A breach and close above 1.3750 nullify this downward pattern.
